SPX 2-Hour Chart Negative Divergence Developing

We have been watching the SPX 2-hour chart the last few days waiting for it to properly set up with negative divergence to signal the top is in but the bulls keep eking out upside juice with long and strong indicators. When the FOMC Minutes were released at 2 PM, the SPX 30-minute and 1-hour charts were negatively diverged across all indicators and the 2-hour chart was as well, except, for the RSI and MACD line that squeezed out tiny higher highs. Thus, a higher high is needed for price again, and especially with the money flow jumping on the long and strong band wagon again as well. Sometimes waiting for all the indicators to line up properly is like herding kittens.

So the bulls can keep the SPX price elevated for another 1 to 3 candlesticks, 2 to 6 hours of trading time which is the bulk of Thursday trading. So same-o, same-o. Watch for the neggie d to form with RSI and MACD line rolling over. The TRIN prints an uber low 0.50 and the low put/call ratios point to a near-term top as soon as  the RSI and MACD line and money flow oblige.

Watch the all-time record closing high at 1987.98 and all-time record intraday high at 1991.39 from 7/24/14 four weeks ago.  Price moved above the closing high today but could not print a new closing high. The two upside gaps are now filled so price has no reason to move higher except for the RSI, MACD line and money flow long and strong indicators. Volume is very light the last three days as price moves higher. Today the RUT small caps and Nasdaq indexes closed negative. The bulls keep finding a way to squeeze juice out helped by positive Putin geopolitical soundbites. Markets should top out tomorrow (as soon as neggie forms across all indicators above) and a 20 to 50-handle drop is anticipated barring any positive geopolitical news bites that goose the markets a few handles higher.

Keystone's algo, Keybot the Quant, is long and indicates that JJC 38.73 is the critical bull-bear line that is determining overall equity market direction right now so pay attention. JJC begins tomorrow at 38.70 only 3 pennies on the bear side. Watch copper trading overnight since higher copper will create an upside market orgy tomorrow with the SPX and other indexes printing new all-time highs and a big market party occurring. If copper trades negative overnight the bears plan on coming with game on Thursday. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.